President Obama unveiled a plan Tuesday to increase regulatory oversight of oil markets to limit the “illegal manipulation, fraud, and market rigging” that have contributed to gas price increases. Citing many Americans’ pain at the pump, the President asked Congress for an additional $52 million for the CFTC to clamp down on speculators.

Gas prices have jumped about 20% since December, currently averaging $3.904 a gallon, according to AAA’s daily fuel gauge report. Much of that surge can be attributed to a spike in crude oil prices, gasoline’s main input, with WTI contracts (the U.S. benchmark), breaking the $100 per barrel mark in January and remaining elevated ever since.

Obama is looking to cap that appreciation, specifically by targeting speculation. Speaking from the White House’s Rose Garden, the president said “we can't afford a situation where speculators artificially manipulate markets by buying up oil, creating the perception of a shortage, and driving prices higher -- only to flip the oil for a quick profit.”

The President noted that higher gas prices act like an additional tax for people that need their cars to work or buy basic necessities. Obama went further, adding that “under my Administration, America is producing more oil than at any time in the last eight years.” The President did recognize structural factors, such as geopolitical instability in the Middle East and the fact that the U.S. consumes 20% of global crude oil production but only has 2% of proved reserves, have exacerbated the problem.

Tuesday’s target, though, was not Iran or the global tightness in oil markets, it was financial speculators. Obama asked Congress to help fund a six-fold expansion in the CFTC’s oil futures market trading staff, along with “critical technology upgrades,” all of which would cost about $52 million, taking the CFTC’s budget up to $308 million by fiscal 2013.

Obama also called for harsher civil and criminal penalties for manipulation in key energy markets. Fines would be increased to $10 million, from $1 million currently, along with “a new toughened penalty structure for market manipulation in energy markets.”

The CFTC would also grow its regulatory power under the new plan, allowing it to set margin requirements in oil futures markets. Currently, exchanges (like the CME Group) determine margin requirements, or how much collateral a trader must post to enter or maintain a position. Obama is proposing that the CFTC be given direct authority to set margin requirements.

Oil prices firmed through Tuesday’s session, with crude oil for May delivery up 1.6% to $104.55 per barrel by 12:54 PM in New York. Shares in major oil companies were trading in positive territory too, with Exxon Mobil gaining 1.8% while Chevron rallied 2.4%; ConocoPhillips was also up. Gold was pretty much flat at $1,649.80 an ounce, while the greenback slid marginally, with the U.S. dollar index down 0.04% to 79.528.

It is unclear how much of the price of gas is a direct consequence of crude oil market manipulation. Experts from Nomura to HSBC agree geopolitical tensions, particularly around Iran, and tight market conditions have contributed to keep prices elevated. Ultra-loose monetary policy, which floods markets with liquidity, has also helped.

Obama's critics, like House Speaker John Boehner, have called the plan unnecessary. Boehner said the White House already has all the muscle it needs, asking "where is his Federal Trade Commission? Where is the SEC?." Boehner added "he's got agencies there, so instead of another political gimmick why doesn't he put his administration to work to get to the bottom of it."